Ethical Sourcing & MEC: Jacking Cars & Heisting Economies

An ex coworker’s father was off to work one early morning in his shiny red buckie (truck) when three black youths tried to car jack him.  Ahead of him by 30 meters, they blocked the road waving guns and signaled him to pull aside.  Instead, he sped up the vehicle and dodged the thieves.  One of them fired his gun piercing the passenger side with a bullet.  In a surge of anger and adrenalin, the driver spun the truck around and hammered the gas pedal.  The buckie jerked forward at the youths.  Within moments the 3000 pound vehicle rolled over one of the attackers while scattering the rest.  This happened in Alexandra, one of the most violent townships in South Africa. 

The driver fled the scene and deposited his buckie indefinitely with relatives in Durban.  He was physically unharmed.  How seriously injured was the youth under the truck is unknown.  What is clear is the incident was left unreported and a police investigation wasn’t conducted. 

Unchecked violence is not unique to South Africa.  It happens in many developing countries where law enforcement is primitive.  It’s backward not because of a moral inferiority but because the requirements (e.g., trained and paid law enforcement, functioning judicial system, clear laws, schools, jobs and etc.,) to foster a law abiding society are under developed.  Regrettably, this underdevelopment isn’t only unique to law enforcement, it exists in the economy, politics, health care, environmental management and etc. 

The consequences of underdevelopment are vast.  It leads to economies that don’t adequately support citizens, political systems than discourage freedom and social institutions that fail the people they serve.  When this happens people bear the brunt in terms of high illiteracy, mortality, hunger, violence and environmental disasters.  This explains why the quality of life in the developing world is low compared to that of the West.  To glimpse this disparity check out the UN Developlment Index. It’s a depressing read.

The underdevelopment of the developing world gives many economic advantages to retailers and consumers in the Western world.  It subsidizes our "way of life" by not reflecting the true costs of labour or the environment in manufacturing.  Hence, as retailers it helps us to buy and sell goods at low prices.  As consumers, it helps us to buy gadgets and gear on the cheap.   Judging by our consumer culture we’ve done smashingly well from this skewed arrangement.

But what exactly are the costs to the developing world?  Well they are both human and environmental.  In terms of human costs the shift of mass production from high cost zones (developed world) to low cost ones (developing) has helped create an enormous cadre of low wage workers.  These laborers typically earn less than legal minimum wage (30-50 cents per hour or 4-8% of Canadian minimum wage) and can work up to 100 hours per week often in physically detrimental conditions.  This work life is unhealthy.      

The environmental costs are equally dramatic.  About two years ago, a MEC employee Katherine was in Southern India inspecting one of our organic programs.  On her journey to the factory, she drove by the Noyyal River, one of India’s major water sources that historically supported "life".  Today, the Noyyal and surrounding waters are a dumping ground for much of India’s textile industry.   On the day of Katherine’s trip, the river was a  stunning turquoise blue.  As one web site. cheekily writes "the colour of the regions water varies with the mood of Paris fashions".

The toxic hues of the Noyyal River signal a collective laxness by government and industry.  This attitude makes India’s garment industry highly competitive because the costs of pollution are not reflected in a meter of cloth or unit of apparel.  Instead they are borne by the impoverished who live along the coastal communities of India’s textile industry.   

The challenge for us all (retailers, consumers, factories and government) is to recognize the social and environmental costs of manufacturing in the developing world and to account for these consequences in our retailing practices and shopping habits.  Unless we do so, the developing world will continue to subsidize the developed.  The affluent will benefit from the impoverished.   

Despite these serious costs, there are benefits accrued.  For example, the economic rise of Japan, Singapore, Taiwan and South Korea after WWII is attributed to industrialization all supported by "good" government policies, vibrant schools and other social institutions.  These countries evolved from exporters of cheap trinkets to makers of advanced chips and textiles.  Along the way, they’ve pulled hundreds of millions of people out of poverty while giving them a quality of life previously known only to the West.  These countries symbolize what is possible for emerging economies.   

About 46% of everything on our retail floor is made by factories in the developing economies.  These contract factories are located in 32 countries on every continent (for details read 2006 Ethical Sourcing Report).   Our Ethical Sourcing program is capturing the social and environmental implications of manufacturing and is devising incremental steps to address them.   

The economist Partha Dasgupta, of the Royal Swedish Academy of Sciences., describes our contemporary economy as a "cruel paradox".  He suggests that in order for the West to continue its affluence, it must rely on a developing world that sells short its human capital and natural resources.  Or as he writes "… contemporary economic development is unsustainable in poor countries because it is sustainable in rich countries".

The co-worker who shared the story of his father and the failed car jacking was visibly non plus when he recounted the events.   But I know he was deeply troubled by both the intimacy of the violence and the broader implications for his country.  We in the developed world can’t be indifferent to the harm inflicted on the world’s poor. And if we are we risk becoming the 3000 lb truck racing towards the impoverished.  The lucky few will dodge our oncoming force but the majority will be crushed under our weight.